The 14th Labour Market Index, results

2018-07-02

EBA Western Ukrainian office together with Lviv Consulting Group quarterly conduct research on labour market of Western Ukraine using questionnaire on Western Ukraine Labour Market Index. The aim of this Index is to define dynamics of the situation in the market in order to identify areas for improvement.

This year such survey was conducted during the period March through April. The biggest companies of Western Ukraine were invited to participate (24 companies responded to questions in the survey).The integrated index reached 2.5 points (5 – definately favourable for employers, 1 – definitely unfavourable for employers), which means that the majority of the respondents still see some difficulties on the labour market.

Key figures of the Index (14th wave) are the following:

Around 50% of companies in the second quarter of 2018 plans to review salaries:

37,5 % of companies may increase salaries by 10 % - 15%

12,5 % of them may increase salaries by 20% – 35 %

Dynamics of gross salary changes for employees with 2+years’ experience for the first 4 months of 2018:

salary of non-skilled workers have not changed and are at the level of 6100-7000 uah

salary of skilled workers went up by 15% on average and amount to 9100-13000 uah

salaries of administrative employees are at the level of 2017 and amount to 8100-9000 uah on average; but administrative employees with experience 3 to 5 years enjoy a 20% – 25% pay increase up to 13000 – 15000 uah

salary of specialists went up by 15% and amount to 12 000 – 14 000 uah on average

middle level managers’ salaries increased by 25%-30%, now they earn from 16000 uah to 22000 uah

Final year students and fresh graduates without practical experience are offered 4200 uah – 6000 uah by employers.

“Among the reasons why the Index level is below the neutral zone are: a significant drop in quality of personnel due to labour migration, complexity of retaining or attracting remaining resources with existing pay levels in Western Ukraine.

Companies pointed out that, on one hand, they compete with Poland and neighboring countries, and, on the other hand, there is competition with the state, for example, due to subsidies provided by our government. Some employers mentioned that they had received propositions from employees to receive wages “in envelopes” in order to qualify for subsidies. The “white” companies that participated in the survey also compete with less-conscious players on the market that agree to pay wages “in envelopes” to avoid paying high taxes.

In addition, companies pointed out that there is not enough young, qualified and skilled candidates graduating universities to fill up the outflow. ”

Maryana Lutsyshyn, Team Leader of EBA Western Ukrainian Office, in her comments to the results of the Index, noted that if you look at the dynamics of the Index, the situation does not look quite optimistic. Companies still complain on a high level of labour migration. However, one should not create the illusion that migration processes are the only existing issues on the labour market in Western Ukraine. Migration is a natural process that exists in every country. It is worth considering steps that should be done to keep Ukrainians at home, and create appropriate conditions for those who would like to return from abroad and apply their experience in Ukraine.

“As we can see, according to the Index, labour market is currently in an unfavourable position for employer. However, I truly hope that this should not cause another wave of dissatisfaction, but encourage business and government to implement active actions. The position of a fair/even business should be in a passive mode, i.e. one should not expect favourable conditions on labour market happening itself to make various ferent investment decisions. In contrary, it is necessary to work towards creation of conditions for development and retainment of talents to insure increase in your own organisation.

Tendencies of labour outflow is not a new topic. International companies with its affiliates abroad are talking about it, on the first place. Why not offer them the opportunity to go abroad to work abroad within their group? Thereby, companies will not only retain employees, but would be able to receive additional advantages by implementing employees’ skills and experience in the parent company, and might have employees who are already savvy to work in a qualitative international environment”.

EBA continues to actively work on improving the situation on labour market. Thus, on April 27 EBA members gathered for brainstorming session and discussed what can business do in order to influence on the situation and what will be good to do from the government’s side.